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Current Market Outlook


After lots of sloppy and weak action in June, July and the first half of August, the past two weeks have certainly been an improvement—the major indexes have popped higher, often in the face of bad news and uncertainties, and many of the resilient growth stocks did the same. We can’t conclude the market is out of the woods, as the broad market is still iffy, the intermediate-term trend is mostly sideways and relatively few stocks have actually broken out on good volume. Still, this is probably the best action by growth stocks (which have led the way higher this year) since June, so we’re not complaining. We’re moving our Market Monitor up one notch to a level 6 (out of 10); you can put a little more money to work, though we need more upside confirmation before getting bullish.

This week’s list contains a mix of familiar and newer names, all of which are showing great strength. For our Top Pick, we’re going with Match Group (MTCH), which has exploded to new highs; it’s a bit thin, but we like the overall growth story and the recent power. Try to buy on dips.

Stock Name	Price	Buy Range	Loss Limit
BeiGene (BGNE)	170.20	71-75	64-66
Catalent Inc (CTLT)	0.00	41-39	37-36
Franco-Nevada (FNV)	125.51	80-83	74-76
Match (MTCH)	0.00	21-22.5	19.5-20.5
Shopify (SHOP)	585.00	105-110	94-96
SolarEdge Technologies Inc. (SEDG)	124.37	25-27	23-24
TowerJazz (TSEM)	0.00	28-30	25.5-26.5
Universal Display (OLED)	187.54	123-129	113-116
Werner Enterprises (WERN)	0.00	31.5-33	29.5-30.5
Wynn Resorts (WYNN)	121.08	137-143	129-132

Today’s selection is a company you’ve probably not heard of, but it provides a valuable medical technology that should see increased use in the years ahead. Also, it’s growing by acquisition.

Current Market Outlook


The market’s gradual improvement since mid-August continued last week, with the intermediate-term trend of the major indexes turning back up and individual stocks (including both leading growth stocks, as well as many sectors bouncing strongly off prolonged corrections) acting well. We’ve even seen an impressive rebound in the broad market, with the number of stocks hitting new lows drying up drastically. We can’t say the major indexes are incredibly powerful, as many are at or just above their prior highs, but overall, the most bullish thing a market can do is go up, and that’s what we’re seeing. We’ll push our Market Monitor up another notch this week to a level 8 (out of 10) and will continue to put money to work as the evidence improves.

This week’s list has a bunch of strong charts from a variety of industries, including three chip names as that sector reasserts itself. For our Top Pick, we’ll keep it simple and go with one of the market’s liquid leaders—Nvidia (NVDA) has exploded out of a tight base on big volume over the past two days. You could start a position here or on dips.

Stock Name	Price	Buy Range	Loss Limit
Adient (ADNT)	0.00	76-79	71-73
Allegheny Technologies (ATI)	27.78	21.5-22.5	19-19.5
Bitauto Holdings (BITA)	0.00	42-45	36.5-38.5
Celgene (CELG)	0.00	139-143	131-133
Lear Corp. (LEA)	0.00	160-166	149-152
Micron Technology, Inc. (MU)	43.31	33-35	30.5-31.5
NVIDIA Corporation (NVDA)	242.42	177-188	164-170
ON Semiconductor (ON)	24.07	16.7-17.4	15.2-16.
Square, Inc. (SQ)	91.04	27-28.5	24.5-25.5
Terex (TEX)	0.00	41.5-43.5	37.5-39

Today’s featured recommendation is a low-risk financial stock that will give the portfolio some stability (and income). And since the portfolio doesn’t currently own a bank stock, this will provide some healthy diversification.

Despite a hiccup in the past couple of days from Chinese stocks, the U.S. market and the emerging markets continue to outpace their moving averages by comfortable margins. In today\'s issue, I talk about how little profit taking in a couple of our strongest stocks can protect your portfolio while maintaining your exposure.

Current Market Outlook


During the past two-plus weeks, we’ve seen the Nasdaq and most leading growth stocks lag most other indexes, and things came to a head today, with the sellers unloading on many of the market’s biggest winners this year. As for the overall market, there are plenty of areas of strength as money rotates into both turnaround situations and some growth-oriented ones, too. So what should you do? For the stocks you own, follow your plan and honor your stops; it’s OK to take a couple of partial profits, too, if you are holding some long-time winners. As for new buying, you should focus on areas that are working and stocks that have shown good-volume buying recently. We’re moving our Market Monitor back down to a level 7 tonight.

This week’s list has many such possibilities, including a few with solid stories. Our Top Pick is Guess? (GES), which looks like a solid turnaround story as it’s seeing excellent growth overseas.

Stock Name	Price	Buy Range	Loss Limit
Alnylam Pharmaceuticals (ALNY)	143.58	107-113	97-99
Blue Buffalo Pet Products (BUFF)	0.00	26.5-27.5	24.5-25.5
Guess (GES)	0.00	15.6-16.4	14.2-14.8
Juno Therapeutics (JUNO)	0.00	40.5-44	35-37.5
Lending Tree (TREE)	411.51	230-240	215-220
Navistar International (NAV)	0.00	38-40	35-37
RPC Inc. (RES)	0.00	22.5-23.5	20.5-21.5
Sociedad Quimica (SQM)	0.00	51-54	46-48
Ultra Clean Holdings, Inc. (UCTT)	0.00	26.5-28.5	23.5-24.5
Weibo (WB)	98.16	94-97	85-87

Today’s bargain is a little-known stock in the fast-growing industry of marijuana farming, production and distribution, which recently was selling at a discount of more than 50% from its recent high. It’s rebounded a bit since then, but is trading calmly, and I think this is a decent entry point.

Current Market Outlook


We can’t complain about the market’s action recently—the major indexes have (at the very least) held the strong gains of the past couple of weeks, with the strongest among them (like the Nasdaq) pushing higher. And many individual stocks (especially growth stocks) look vibrant, which is a plus. That said, we can’t conclude that the bulls are back in control, as most major indexes are still hovering around their 50-day lines, and in the broad market, the number of stocks hitting new highs (even on the strong Nasdaq) remains very low. We’re close to an all-clear signal, and think it’s fine for you to hold your strong stocks and do a little buying here or there. But right now, we’re keeping our Market Monitor at neutral until we see confirmation of an uptrend.

This week’s list has a ton of good stories and charts, with growth stocks well represented. It’s hard to pick just one, but we’ll go with Red Hat (RHT), which looks like a big-cap leader of the leading software group.

Stock Name	Price	Buy Range	Loss Limit
Arch Coal (ARCH)	82.27	95-99	87-89
GoDaddy (GDDY)	0.00	58-61	53-55
MuleSoft (MULE)	0.00	28.5-30.5	26-27.5
Netflix, Inc. (NFLX)	423.92	280-290	255-260
Planet Fitness (PLNT)	0.00	34-36.5	31-32.5
Red Hat (RHT)	0.00	142-148	130-134
TAL Education (TAL)	50.49	35-37	32-33
Twilio (TWLO)	183.39	31.5-33.5	28-29.5
Vale S.A. (VALE)	15.40	13.7-14.5	12.6-13
Zendesk (ZEN)	82.19	40.5-42.5	36.5-38

Your Spring issue of Cabot’s 10 Best Marijuana Stocks is ready, with updates on the 10 stocks we’ve been following and two new stocks I’ve added to the mix.

And it’s a great time to take a fresh look at all of them, as the market’s recent correction has brought most of them down to what look like good buying areas. Yes, the correction is deep, but it was overdue, and long term, I remain very optimistic about the sector.

My recommendation this week is a high-quality Chinese growth stock that has just completed a normal pullback. In fact, while the market was down today, this stock was up!

Current Market Outlook


The market is coming off another very solid week, with the major indexes tagging higher highs on solid volume and the early returns from earnings season generally positive. It is fair to say the advance is becoming more selective, with some factors (bad earnings, rising interest rates, falling U.S. dollar) causing certain areas to stall out. Overall, we remain bullish, especially in the longer-term, as this recent unusual strength has historically portended good things down the road. In the near-term, though, you should be taking things on a stock-by-stock basis, ditching stocks that break their intermediate-term uptrends and looking for buying opportunities either on shakeouts (in established leaders) or earnings blastoffs.

This week’s list has everything from turnarounds to speculations to recent earnings winners—there’s a lot to like here. Our Top Pick is AbbVie (ABBV), which has been a steady liquid leader in the biotech space and just popped on earnings.

Stock Name	Price	Buy Range	Loss Limit
AbbVie Inc. (ABBV)	93.53	117-123	106-109
G-III Apparel (GIII)	45.25	37-39	33.5-35
Helmerich & Payne (HP)	63.68	70-74	63-65
Ligand Pharmaceuticals (LGND)	267.14	161-167	147-151
Neurocrine Biosciences (NBIX)	123.40	86-90	77-79
Shopify (SHOP)	585.00	122-128	108-112
Spectrum Pharmaceuticals (SPPI)	19.31	21.5-23	19-20
Sprouts Farmers Market (SFM)	19.00	26-28	24-25
Varian Medical (VAR)	118.33	122-126	113-115
Weibo (WB)	98.16	128-134	115-118

Today’s stock candidate is a promising small-cap biotech with two high-potential drug candidates, each of which could develop into a billion-dollar asset.

The title of today’s issue is “Don’t Overreact”—the major trend of the market is still up, and there are many signs pointing to higher prices in the months ahead. Chloe adds a new stock to the Safe Income Tier and presents her view on the forces affecting interest rates and income investments today.

This week’s recommendation is a special situation—a transport stock that, thanks mostly to a game changing acquisition, is poised for major earnings growth. And the stock is holding up well after a recent earnings pop.

Current Market Outlook


After a big run last year and a moonshot during January, the sellers have finally come out of the woodwork, pushing the major indexes (and many leading stocks) sharply lower during the past six trading sessions, including a mini-crash today (the Dow was down 1,500 points at one point!). Looking at the evidence, the bull market (longer-term trend) is still intact, but the intermediate-term trend has turned negative and many leading stocks have come unglued. In the near-term, we certainly wouldn’t be shocked to see a snap back, but following a major extreme in price and sentiment two weeks ago and this abnormal selling, stocks probably need some time to wear out the weak hands and digest their recent gains. We’re moving our Market Monitor down to neutral to respect the change in the evidence—we don’t advise selling wholesale here, but you should honor your stops and loss limits, and on the buy side, be very choosy and keep new positions small until the market finds support.

This week’s list is a potpourri of stocks and sectors, most of which have recently reacted well to earnings. Our Top Pick is Pure Storage (PSTG), a fast-growing outfit that emerged from a base on big volume last month.

Stock Name	Price	Buy Range	Loss Limit
Autohome (ATHM)	98.65	73-77	67-69
BofI Holding (BOFI)	42.93	33-35	30-31.5
Harris Corp. (HRS)	198.60	145-150	137-139
Knight-Swift Transportation Holdings Inc. (KNX)	40.61	46-48.5	42.5-44
LPL Financial Holdings (LPLA)	85.22	59-62	56-57.5
MercadoLibre, Inc. (MELI)	980.83	340-360	310-320
Meritor (MTOR)	21.46	27-28.5	25-25.5
MyoKardia (MYOK)	108.56	47-51	42-44
Pure Storage (PSTG)	25.64	18.5-19.5	17-17.5
Shutterfly (SFLY)	94.71	68-72	59-63